Absci (ABSI) risk factors, FY2024 10-K

Risks Related to Our Financial Condition and Need for Additional Capital

1. 01Our current business has a limited operating history, which may make it difficult to evaluate our business and predict our future performance
2. 02We have incurred significant losses since inception, we expect to incur losses in the future and we may not be able to generate sufficient revenue to achieve and maintain profitability
3. 03We will need to raise additional capital to fund our operations and improve our Integrated Drug Creation platform. If we are unable to raise additional capital on terms acceptable to us or at all, we may not be able to compete successfully, which would harm our business, operations, and financial condition

Risks Related to Biologic Drug Development

1. 04regulatory milestones, including marketing approval, or become viable commercial technologies, on a timely basis or at all, which would harm our ability to generate revenue
2. 05product candidates generated through our platform, this could negatively affect our revenue opportunity for that program, and/or have broader deleterious effects on our reputation and future partnership prospects
3. 06The clinical development of our product candidates could be substantially delayed if we are required to conduct unanticipated studies, including preclinical studies or clinical trials, or if the FDA imposes other requirements or restrictions including on the manufacture, of our product candidates
4. 07If we or our partners encounter difficulties enrolling patients in clinical trials of product candidates developed using our Integrated Drug Creation platform, our and our partners’ clinical development activities could be delayed or otherwise adversely affected
5. 08The biopharmaceutical platform technology market is highly competitive, and if we cannot compete successfully with our competitors, we may be unable to increase or sustain our revenue, or achieve and sustain profitability
6. 09However, in some cases, we may wish to collaborate with such companies if synergies with our Integrated Drug Creation platform are identified
7. 10competitors that involve upfront payments rather than downstream revenues. We may not be able to compete effectively against these organizations
8. 11We face competition from entities that have made substantial investments into the rapid development of novel treatments for the therapeutic indications in which we are engaged in partnered programs and internally developed programs, including large and specialty pharmaceutical and biotechnology companies
9. 12The market for our platform, including potential partners and potential investors, may be skeptical of the viability and benefits of our Integrated Drug Creation platform because it is based on novel and complex synthetic biology and AI technologies
10. 13We could experience clinical supply and manufacturing problems that result in delays in the development, approval or commercialization of our product candidates or otherwise harm our business
11. 14If we do not achieve our projected development goals in the timeframes we announce and expect, the commercialization of our programs and validation of our Integrated Drug Creation platform may be delayed and our expenses may increase and, as a result, our stock price may decline
12. 15Healthcare reform efforts aimed at lowering the price of biopharmaceutical products may impact our ability to maintain sufficient profits
13. 16Existing regulatory policies may change, and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product candidates
14. 17of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we may have obtained, and we may not achieve or sustain profitability
15. 18We expect to make significant investments in our continued research and development of new technology, which may not be successful

Risks Related to Our Partnership Business Strategy

1. 19Our commercial success depends on the technological capabilities of our Integrated Drug Creation platform and the advancement of our internally developed programs
2. 20We are substantially dependent on the successful application of our Integrated Drug Creation platform to initiate and advance partnered programs and to develop our internally developed programs that can be further developed by our current or future partners
3. 21Our partnership strategy significantly depends on the eventual approval and commercialization of product candidates developed under our partnerships for which we may have no control over the clinical development plan, regulatory strategy or commercialization efforts
4. 22If we cannot maintain our current relationships with partners, fail to expand our relationships with our current partners, or if we fail to enter into new relationships, our future operating results would be adversely affected as a general matter
5. 23Our revenue under our partnered programs for any particular period, or on an absolute basis, can be difficult to forecast
6. 24The failure of our drug creation partners to meet their contractual obligations to us could adversely affect our business
7. 25Our partners may not achieve projected discovery and development milestones and other anticipated key events in the expected timelines or at all, which could have an adverse impact on our business and our anticipated revenue

Risks Related to Our Operations

1. 26We rely on a limited number of suppliers for laboratory equipment and materials and may not be able to find replacements or transition to alternative suppliers on a timely basis, or at all
2. 27Our Integrated Drug Creation platform may not meet the expectations of our partners, which means our business, financial condition, results of operations and prospects could suffer
3. 28We will need to develop and expand our workforce, commercial infrastructure and laboratory operations to support anticipated growth in demand for our drug creation programs, and we may encounter difficulties in managing this development and expansion
4. 29any one of these areas could make it difficult for us to meet market expectations for our technologies, and could damage our reputation and the prospects for our business
5. 30The loss of any member of our senior leadership team or our inability to attract and retain highly skilled scientists and business development professionals could adversely affect our business
6. 31We in the past have, and in the future may, make technology acquisitions, acquire businesses or assets, or make investments in other companies or technologies that could negatively affect our operating results, dilute our stockholders’ ownership, increase our debt or cause us to incur significant expense
7. 32We may be subject to laws that generally govern the biopharmaceutical industry
8. 33Our equipment financing agreements may contain covenants that restrict our operating activities, and we may be required to repay the outstanding indebtedness in an event of default, which could have a material adverse effect on our business, financial condition, results of operations and prospects
9. 34Our inability to collect on our accounts receivable by a significant number of partners may have an adverse effect on our business, financial condition and results of operations
10. 35If our operating facility becomes damaged or inoperable or we are required to vacate our facility, our ability to conduct and pursue our drug creation and internal research and development efforts may be jeopardized
11. 36We depend on our information technology systems, and any significant disruptions to or failure of these systems could result in significant financial, legal, regulatory, business and reputational harm to our business
12. 37International expansion of our business exposes us to business, regulatory, political, operational, financial and economic risks associated with doing business outside of the United States
13. 38Any of these factors could significantly harm our future international expansion and operations and, consequently, our revenue and results of operations
14. 39We use biological and hazardous materials that require considerable expertise and expense for handling, storage and disposal and may result in claims against us
15. 40Public health crises such as pandemics or similar outbreaks could cause a disruption of the development of our platform technologies, and adversely impact our business

Risks Related to Our Intellectual Property

1. 41Changes in patent law in the United States and other jurisdictions could diminish the value of patents in general, thereby impairing our ability to protect our technologies
2. 42Issued patents covering our Integrated Drug Creation platform and other technologies could be found invalid or unenforceable if challenged
3. 43If we cannot acquire or license rights to use technologies on reasonable terms or if we fail to comply with our obligations under such agreements, we may not be able to commercialize new technologies or services in the future and our business could be harmed
4. 44While we still face all of the risks described herein with respect to those agreements, we cannot prevent third parties from also accessing those technologies. In addition, our licenses may place restrictions on our future business opportunities
5. 45We may not be able to protect our intellectual property rights throughout the world
6. 46technologies; in some countries, it may not be possible to rectify an incorrect translation, which may result in patent protection that does not adequately cover our technologies in those countries
7. 47Intellectual property rights do not necessarily address all potential threats to our competitive advantage
8. 48If we are unable to protect the confidentiality of our information and our trade secrets, the value of our technologies could be materially adversely affected, and our business could be harmed
9. 49We may be subject to claims that our employees, consultants, or independent contractors have wrongfully used or disclosed confidential information of third parties or that our employees have wrongfully used or disclosed alleged trade secrets of their former employers
10. 50We may not be able to protect and enforce our trademarks and trade names, or build name recognition in our markets of interest thereby harming our competitive position
11. 51We may be subject to claims challenging the inventorship of our patents and other intellectual property
12. 52If we become involved in patent litigation or other proceedings related to a determination of rights, we could incur substantial costs and expenses, substantial liability for damages or be required to stop our development and commercialization efforts of our technologies
13. 53Obtaining and maintaining our patent protection depends on compliance with various required procedures, document submissions, fee payments and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
14. 54Patent terms may be inadequate to protect our competitive position with our technology for an adequate amount of time
15. 55a preference for U.S.-based companies, and compliance with such regulations may limit our exclusive rights and our ability to contract with non-U.S. manufacturers

Risks Related to Our Common Stock

1. 56Our share price may be volatile, and you could lose all or part of your investment
2. 57We in the past have had, and in the future may have, a material weakness in our internal control over our financial reporting process. If we are unable to remediate an identified material weakness, we may not be able to accurately or timely report our financial condition or results of operations
3. 58We are obligated to develop and maintain proper and effective internal control over financial reporting. These internal controls may not be determined to be effective, which may adversely affect investor confidence in our company and, as a result, the value of our common stock
4. 59Future sales and issuances of our common stock or rights to purchase common stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall
5. 60We do not intend to pay dividends on our common stock, so any returns will be limited to the value of our common stock
6. 61Our principal stockholders and management own a significant percentage of our shares and will be able to exert significant influence over matters subject to stockholder approval
7. 62Future sales of our common stock in the public market could cause our share price to fall
8. 63An active trading market for our common stock may not continue to be maintained
9. 64Provisions in our corporate charter documents and under Delaware law could make an acquisition of us more difficult and may prevent attempts by our stockholders to replace or remove our current management
10. 65voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner
11. 66Our ability to use our net operating losses and certain other tax attributes may be limited
12. 67Changes in tax law may adversely affect us or our investors
13. 68If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about our business, our share price and trading volume could decline
14. 69Unfavorable U.S. or global economic conditions could adversely affect our business, financial condition or results of operations
15. 70Raising additional capital may cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights to our technologies
16. 71Our employees, consultants and commercial partners may engage in misconduct or other improper activities, including non-compliance with regulatory standards and requirements, and insider trading
17. 72We do not carry insurance for all categories of risk that our business may encounter and our policies have limits and significant deductibles. Some of the policies we currently maintain include general liability, property, umbrella and directors’ and officers’ insurance
18. 73Cybersecurity incidents, data breaches, loss of data and other disruptions could compromise sensitive information related to our business or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation
19. 74Social media platforms present new risks and challenges to our business
20. 75We are an emerging growth company, and the reduced reporting requirements applicable to emerging growth companies could make our common stock less attractive to investors
21. 76We have incurred and will continue to incur significant increased costs as a result of operating as a public company, and our management will be required to devote substantial time to new compliance initiatives
22. 77will not be required to implement the more stringent requirements sooner than budgeted or planned and thereby incur unexpected expenses
23. 78Our results of operations and financial condition could be materially adversely affected by changes in accounting principles
24. 79If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our results of operations could be adversely affected
25. 80Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud